Role of the Center

Examining the role of the center helps CEOs of companies with ineffectual structures determine the best organizational model for their firm. Centers must be "fit for purpose," with roles aligned to company's business profile, strategy and leadership style, which means that there is no standard formula.

Where can the corporate center add value to the enterprise, and where is corporate governance a drag on performance? Examining the role of the center helps CEOs of companies with bloated or ineffectual structures determine the best organizational model for their firm or group of holdings. It allows for improved decision making and resource allocation by assigning which functions and decisions are the corporate headquarter's responsibility and which the operating units can best handle.

Bain identifies four models for the role of center, based on the relationships among the business units. Having developed a thorough understanding of the advantages and disadvantages of each, we help clients decide which one best suits their needs. We focus on limiting the center's role to where it aligns capabilities, strategy, culture and people.

Bain starts with an assessment of key functions, comparing the informational, reporting and cost advantages of centralization versus decentralization. As part of this work, we quantify the benefits of moving or maintaining various corporate roles. We then help design a new blueprint for the center, develop ways to communicate the center's role to the organization and set up an ongoing evaluation program.

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